Neoliberalism: ‘Profit Goes To Apple And Microsoft, Not To The Taxpayer’ – By Kit O’Connell

In conversation with noted political philosopher Noam Chomsky, former Greek Finance Minister Yanis Varoufakis said neoliberalism is “just 19th century power politics of crushing anyone who dares stand up to them and say a simple word, ‘No.’”

AUSTIN, Texas — According to noted political philosopher and scholar Noam Chomsky, neoliberal politicians are hypocrites who prioritize corporate finances over both taxpayers’ well-being and their own economic principles.

Independent media site acTVism Munich released an excerpt from their one-hour dialogue on Tuesday. The first in a series of videos of the dialogue focuses on neoliberalism and how it’s shaped the modern world and global economy.

“One of the paradoxes of neoliberalism is that it’s not new and it’s not liberal,” said Chomsky, a professor of linguistics at MIT who is also well known as a scholar of global politics and economics.

Neoliberals generally support free trade, deregulation, privatization, and austerity-driven policies, including cuts to social services. The philosophy rose to prominence in the United States during the Clinton administration.

Prior to joining the Greek government as finance minister in January 2015, Varoufakis was an academic and economist. Failing to negotiate a bailout deal for the country’s economy which would relieve the unemployment, starvation and suffering caused by devastating austerity policies instituted by neoliberals in the European Union, Varoufakis resigned from his post within a year. He told Chomsky:

“What strikes me, given the last quite eventful year of my life, what really strikes me is the major disconnect between the philosophy and ideology of neoliberalism and that which I encountered when negotiating, inverted commas negotiating, when being dictated by the greater the good of the neoliberal international financial establishment.”

He continued that he was no longer finance minister because he “refused another hundred billion smackers, dollars, of tax-backed loan to my insolvent government, which the creditors insisted that I should take,” even though neoliberals typically “castigate all tax-funded activities.”

Later, Varoufakis added:

“Effectively, what I’m trying to say is the intense hypocrisy of the neoliberal establishment … is not really even interested in sticking to its own neoliberal ideology. This is just 19th century power politics of crushing anyone who dares stand up to them and say a simple word, ‘No.’”

Chomsky suggested the banking industry represents another form of “hypocrisy.” It’s an industry beloved by neoliberal politicians even though banks are largely supported through taxpayer bailouts. Referring to a 2014 study of leading U.S. banks by the International Monetary Fund, he explained:

“Virtually all their profits come from their implicit government insurance policy, cheap credit, access to higher credit ratings, incentives to take risky transactions which are profitable, but then if it’s problematic, you guys pay for it.”

For another example of the flaws of neoliberalism and how it benefits the wealthy at the expense of the general public, Chomsky referred to MIT, the university where he works. Chomsky said:

“MIT, where I’ve been since the 1950s, is one of the institutions where the government–the funnel in the early days was the Pentagon–was pouring in money to create the basis for the high-tech economy of the future and the profit-making of the institutions that are regarded as private enterprises. It was decades of work under public funding with a very anti-capitalist ideology.”

“So according to capitalist principles, if someone invests in a risky enterprise over a long period and thirty years later it makes some profit, they’re supposed to get part of the profit, but it doesn’t work like that here. It was the taxpayer who invested for decades. The profit goes to Apple and Microsoft, not to the taxpayer.”